Covered
service providers have until July 1, 2012 to be in compliance with the
Department of Labor’s (DOL’s) 408(b)(2) regulation, which requires disclosing
information about fees and services to plan sponsors of Employee Retirement
Income Security Act (ERISA) plans (see “DOL
Issues Final Rule on 401(k) Fee Disclosure”). Under
404(a)(5), plan sponsors have until August 30 to provide fee information to
participants.

Knowledgeable
advisers will be in demand to provide education and guidance to plan sponsors
and plan participants about these regulations. Sampson recommends ways advisers
can bring added value and create opportunities with current and prospective
clients:

‘Quarterback’ the Process

Advisers can help the sponsors reach out to their service providers and
review all service agreements to ensure they are compliant.

“They can really quarterback the whole process” to make clients feel
comfortable with the new fee disclosure regulations, Sampson said. “If we can
take one more thing off that plan sponsor’s to-do list, that’s the extra value.”

Sampson said he is amazed by how many plan sponsors do not know what
the regulations are, so explaining them in simple terms is extremely helpful.
Advisers can ask questions such as, “Do you know fee disclosure is coming? Do
you know your responsibilities? Are you prepared for participants’ reactions
[to 404(a)(5)]?”

Meet With Participants About 404(a)(5)

A sophisticated adviser, Sampson
said, will also meet with plan participants about 404(a)(5). Educating the
participants before the compliance deadline is crucial so they are clear the
fees are not new, Sampson said. “If a company is not prepared for this, poor HR
is about to get swamped,” he added.

The adviser should explain the value of fee disclosures to participants
and prepare them for their upcoming statements, which will show the fees that
have always existed in their plans. Make it clear that the visibility of these
fees is a positive change for participants and plan sponsors. Sampson suggested
a good way to explain the benefits of participant fee disclosure: “When is the
last time you bought something and had no idea what it cost? We do it every
week in our 401(k) plan.”

Plan advisers should also schedule a meeting with participants to teach
them how to read their quarterly statements, Sampson suggested.

He added, “[Good advisers] are looking for the opportunity to get in
front of people and affect outcomes.”